Bi-Weekly Report 20 March - 2 April 2018


GDP growth reached a 4-year high of 7.4% in FY:17, on strong stimulus measures and a favourable global backdrop

Headline inflation remained broadly unchanged for the third consecutive month in March (at 10.2% y-o-y), despite supportive base effects

The CBRT to keep its key monetary policy instrument on hold at 12.75% at least until December 2019



The banking sector bottom line improved further in FY:17, mainly due to a slowdown in provisioning



The profitability of the banking system strengthened in FY:17, mainly due to lower provisioning



The current account deficit widened temporarily in FY:17, mainly due to an unfavourable energy bill



Banking sector ROAE remained flat at a post-global crisis high of 13.5% in FY:17, despite strong domestic headwinds



Electricity generation declined markedly in FY:17, due to adverse weather conditions

Customer deposits (FX-adjusted) remained subdued in 2017, due to households' preference for high-yielding domestic debt

Credit growth, adjusted for large write-offs and FX variations, is estimated to have reached c. 1.8% in 2017



EC/ECB Post-Programme Review sees reforms momentum as a key to sustaining growth in the medium-term

The current account deficit widened sharply by 1.8 pps to a 7-year high of 6.7% of GDP in FY:17, exclusively on wider energy and ship trade deficits



Incumbent President A.-F. el-Sissi easily secured a second 4-year term

External adjustment has accelerated since the flotation of the EGP in mid-Q2:16/17 (November 2016), with the 4-quarter rolling current account deficit (CAD) narrowing to 3.9% of GDP in Q2:17/18 from 6.6% in Q4:16/17 and a 30-year high of 7.0% in Q2:16/17


Appendix: Financial Markets

Bi-Weekly Report 20 March - 2 April 2018